Ivanhoe (TSX:IVN) Had a Record Quarter: Should You Buy the Stock Today?

Ivanhoe Mines Ltd. (TSX:IVN) delivered record profits in its Q2 2022 earnings, which should spur investors to look hard at this stock.

| More on:
A worker wears a hard hat outside a mining operation.

Source: Getty Images

Ivanhoe Mines (TSX:IVN) is a Vancouver-based company that is engaged in the exploration, development, and recovery of minerals and precious metals. Today, I want to look at Ivanhoe’s most recent quarterly report. We can determine whether this stock is worth snatching up in the second half of August. Let’s jump in.

How has this base metal stock performed so far in 2022?

The S&P/TSX Composite Index was down 111 points in late-morning trading on August 17. Meanwhile, the S&P/TSX Global Base Metals Index was down 2.46% on the same day. Shares of Ivanhoe have dropped 16% in the year-to-date period at the time of this writing. That has pushed the stock into negative territory in the year-over-year period.

Base metals and other commodities enjoyed a solid upswing in 2021 and early 2022. However, fears of a recession brought these back down to earth in recent months. Copper and tin prices gained some momentum this week as softer-than-expected United States inflation data spurred hopes for more dovish monetary policy going forward. A weaker dollar has also provided a boost to base metals so far in 2022.

Investors should be excited after Ivanhoe’s record second-quarter report

Ivanhoe unveiled its second-quarter fiscal 2022 earnings on August 15. The company achieved a record profit of $351 million in the second quarter. It delivered strong results at its major locations.

For example, the Kamoa-Kakula Mining Complex in the Democratic Republic of Congo posted an all-time high in sales of 85,794 tonnes of payable copper. Meanwhile, the Platreef underground mining moved forward with more than 200 metres of lateral development in the second quarter of 2022.

Kamoa-Kakula also delivered record quarterly production of 87,314 tonnes of copper in concentrate. This quarter spurred the company to hike the lower end of its production guidance to between 310,000 and 340,000 tonnes of copper. This followed the commissioning of Ivanhoe’s phase-two expansion. This company finished the quarter with a strong balance sheet. It reported cash and cash equivalents of $507 million as at June 30, 2022. Management stated that it expects copper sales at Kamoa-Kakula will fund expanded capital expenditures on Kamoa Copper’s phase three.

Beyond the base metal success, Ivanhoe also announced the construction of Platreef’s very first solar power plant. It is expected to commission in the third quarter of fiscal 2022. The company aims to use thee electricity generated from this power plant to be used for mining and construction activities going forward.

Ivanhoe: Is the stock worth buying today?

Shares of Ivanhoe Mines currently possess an attractive price-to-earnings ratio of 17. It is trading in more favourable value territory compared to its industry peers. The company has climbed back to profitability and is on track to deliver strong earnings growth going forward. Investors interested in taking a contrarian position may want to snatch up this base metal stock that could thrive if central banks are able to get inflation under control faster than anticipated.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

More on Metals and Mining Stocks

growing plant shoots on stacked coins
Stocks for Beginners

1 Copper Stock to Buy as Copper Prices Shine

The price of copper continues to climb, and more copper production is on the way for this top stock up…

Read more »

silver metal
Metals and Mining Stocks

Buy the Dip: 1 Dividend Stock Due to Shine

This dividend stock's dividend just rose higher as the price of silver dropped, but don't let that scare you off…

Read more »

Metals and Mining Stocks

Iron Stomach? 2 Riskier Stocks That Could Pay Off Big Time in the Future

Two TSX stocks could deliver greater earnings to investors with higher risk appetites.

Read more »

Gold bullion on a chart
Metals and Mining Stocks

This Gold Stock Just Dipped 5%: Time to Buy?

This gold stock has been rising higher and higher but recently went through a 5% dip in share price. So,…

Read more »

Gold king in chess game face with the another silver team on black background (Concept for company strategy, business victory or decision)
Stocks for Beginners

Pan American Silver: Buy, Sell, or Hold?

PAAS stock (TSX:PAAS) is up 44% in the last year alone! But it's not all down to the rise in…

Read more »

Nuclear power station cooling tower
Metals and Mining Stocks

1 Canadian Mining Stock Worth a Long-Term Investment

Strong fundamentals should continue to boost Cameco stock's long-term outlook, as the nuclear industry's momentum continues.

Read more »

Super sized rock trucks take a load of platinum rich rock into the crusher.
Metals and Mining Stocks

Lundin Mining Stock: Buy, Sell, or Hold?

Lundin (TSX:LUN) stock saw its shares surge this last year with the price of copper, and more strong guidance could…

Read more »

grow dividends
Metals and Mining Stocks

Invest $5,000 in This Dividend Stock for $1,060 in Passive Income

Franco Nevada stock trades at a 20% discount to consensus price target estimates while offering investors a tasty yield of…

Read more »